The Lucknow Bench of the Allahabad High Court has quashed recovery orders issued by the Deputy Commissioner, State Goods and Services Tax, Lucknow against M/S AV Pharma.
The Division Bench of Justice Rajan Roy and Justice Manish Kumar passed this order while hearing a petition filed by M/S AV Pharma through its proprietor Smt Madhu Vohra.
The petition has been filed with the following reliefs:-
“(i) to issue a writ, order or direction in the nature of Certiorari quashing the order on Form GST DRC-13 dated 05.10.2024 issued by Deputy Commissioner, State Tax, Lucknow.
(ii) to issue a writ, order or direction in the nature of certiorari quashing the assessment order and DRC-07 dated 02.12.2023 issued by Deputy Commissioner, State Tax, Lucknow.
(iii) to issue a writ, order or direction in the nature of mandamus commanding the respondents to direct the petitioner bank to de-freeze the two bank accounts operated by petitioners in Kotak Mahindra Bank. “
The contention of the counsel for the petitioner is that the impugned orders are barred by sub Section 10 of Section 73 of the UPGST Act, 2017 as they have been passed beyond the time limit prescribed therein as calculated from the due date of filing annual returns prescribed in Section 44 (1), which was extended to 05.02.2020 and the time limit of three years ended on 05.02.2023 but the impugned orders are dated 05.10.2024 and 02.12.2023, therefore, the impugned orders are without jurisdiction.
The Court observed that,
After hearing the parties, what comes out is that for justifying the time limit within which the impugned orders have been passed under Section 73 (9) and (10) of the Act, 2017 for the financial year 2017-18 reliance is being placed upon a notification dated 24.04.2023 by which the time limit of three years mentioned in sub Section 10 of Section 73 was extended for the financial year 2017-18 upto 31.12.2023, however, what is being omitted from consideration by the opposite party is that this notification dated 24.04.2023 has been given retrospective effect only from 31.03.2023 and not prior to it, now, in this context we may refer to Section 73 (10) of the Act, 2017.
Ordinarily the due date for filing annual return is 31st December of the end of the Financial Year, which in the case of financial year 2017-18 would be 31.12.2018, however, this due date for filing annual return, as already observed earlier, was extended vide notification of the Central Board of Direct Taxes and Customs dated, 03.02.2018 to 05.02.2020 and this notification was adopted by the State of UP vide notification dated 05.02.2020.
Based on this notification, the period of three years mentioned in sub Section 10 of Section 73 would end on 05.02.2023 meaning thereby, an order under sub Section 9 of Section 73 for the financial year 2017-18 could have been passed by 05.02.2023 but not after it.
Now the opposite parties are relying on the notification dated 24.04.2023 to submit that in fact they could have passed the order under sub Section 9 of Section 73 uptill 31.12.2023 however in doing so, they omit to consider para no 2 of the said notification which says that the notification dated 24.04.2023 would be applicable retrospectively but only from 31.03.2023 meaning thereby, if the time limit of three years prescribed in sub Section 10 of Section 73 read with sub Section 1 of Section 44 expired prior to 31.03.2023 then the notification dated 24.04.2023 extending the time limit for passing of an order under sub Section 9 of Section 73 would not be applicable, apparently so.
Apparently the impugned orders are beyond the time limit prescribed under sub Section 10 of Section 73 as applicable for the financial year 2017-18 and therefore the impugned orders are beyond jurisdiction being barred by the time provided in the said provision, the Court further observed.
Therefore, the Court allowed the petition and quashed the orders dated 05.10.2024 and 02.12.2023 issued by the Deputy Commissioner, State Tax, Lucknow.